Section 1 Short title
This Act may be cited as the “Innovation, Research, and Manufacturing Act”.
Innovation, Research, and Manufacturing Act
A BILL
To amend the Internal Revenue Code of 1986 to increase and make permanent the research credit.
Sec. 2 Research credit increased and made permanent
Credit amount increased by 50 percent— Paragraphs (1), (2), and (3) of section 41(a) of the Internal Revenue Code of 1986 are each amended by striking “20 percent” and inserting “30 percent”.
Credit made permanent—
In general— Section 41 of such Code is amended by striking subsection (h).
Conforming amendments—
Subsection (c) of section 41 of such Code is amended by striking paragraph (4).
Paragraph (1) of section 45C(b) of such Code is amended by striking subparagraph (D).
Credit allowed against payroll taxes for small employers— Section 41 of such Code, as amended by subsection (b), is amended by adding at the end the following new subsection:
“(h) Credit allowed against payroll taxes for small employers
“(1) In general—In the case of an eligible small employer, so much of the credit determined under subsection (a) for the taxable year (determined without regard to this subsection) as does not exceed the payroll taxes paid by such employer for periods during such taxable year shall be treated for purposes of this title as a credit allowed under subpart C.
“(2) Coordination with research credit—The amount determined under subsection (a) for any taxable year shall be reduced by the amount treated under paragraph (1) as a credit allowed under subpart C.
“(3) Eligible small employer—For purposes of this subsection, the term eligible small employer means a small business concern within the meaning of section 3 of the Small Business Act.
“(4) Payroll taxes—For purposes of this subsection, the term payroll taxes means—
“(A) any tax imposed under section 3111 or 3221(a),
“(B) so much of any tax imposed under section 3211(a) as relates to the rates of tax under subsections (a) and (b) of section 3111, and
“(C) 50 percent of any tax imposed under section 1401.”
Effective dates—
In general— Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2013.
Extension of credit— The amendments made by subsection (b) shall apply to amounts paid or incurred after December 31, 2013.